Forgemasters ‘financially stable’

The boss of Sheffield Forgemasters has spoken out after reports that a Chinese state-backed steel firm was among bidders for the historic company.

Chief executive Graham Honeyman insisted discussions with potential investors were always part of a long-term strategy.

Dr Graham Honeyman, Forgesmasters chief executive

But while the company was dealing with “our most challenging trading conditions” it was financially stable and continued to win orders, he said.

His comments came after a national newspaper report, based on unnamed sources, also claimed Rolls-Royce and BAE Systems may have been supporting the Brightside company with advance payments.

Mr Honeyman added: “The long-term strategy of this business has always included discussions with partner businesses and potential investors, to seek further financing.

“This process will continue and all such talks will remain confidential until we reach a conclusion to that process.

“What is vitally important is that we make clear our intention to preserve this company for Sheffield, the UK and for our employees and stakeholders over the long-term.

“That was the intention of our board of directors when we completed the 2005 management buyout and remains so today.”

In 2010 the incoming Coalition government axed an £80m loan that would have created 180 jobs.

Forgemasters, which employs 760 staff and turns over £80m, was founded in 1805 and is believed to be the world’s last remaining independent steelworks.

Mr Honeyman said that while conditions were tough they were not in the same position as bulk steel manufacturing, which has suffered thousands of redundancies in recent weeks.

“Forgemasters specialises in the largest and most complex castings and forging, our conditions are very different from the factors which are decimating the UK’s bulk steel manufacturing industry.

“The potential for a return to stronger trading is a realistic prospect for this company because of its unique technical capabilities and market reach.”

The firm was a “world leader” in offshore castings, was a “key supplier” to the defence industry in the UK and US, was the largest supplier of steel rolls into Russia and its R&D division was ahead of competitors in the civil nuclear sector, he added.